CHARLESTON, W.Va. — A South Carolina-based construction company, Thompson Construction Group Inc., has agreed to pay the United States $191,070 to settle allegations of violating the federal False Claims Act.

The company, headquartered in Sumter, South Carolina, allegedly submitted false claims for federal disaster recovery grant funds, misrepresenting the compliance of homes built under government contracts.

Allegations of False Claims in Disaster Recovery Efforts

The severe flooding that struck central and southern West Virginia in 2016 resulted in 23 deaths and caused an estimated $1.2 billion in damages. In response, federal disaster recovery funds were allocated to rebuild affected communities, and Thompson Construction was awarded several contracts for home reconstruction.

According to federal investigators, the contracts included strict guidelines to prevent future flooding issues, particularly in homes located within flood-prone areas. These conditions required the installation of crawl space drainage systems and sump pumps—crucial measures to mitigate water damage risks in future storms.

While Thompson Construction successfully built the homes under its contract, investigators later discovered that these vital drainage systems and sump pumps had not been installed, despite the company certifying that all contract requirements were met.

Settlement Under the False Claims Act

Under the settlement agreement, Thompson Construction Group will pay a total of $191,070—comprising $95,535 in restitution and an additional $95,535 in double damages, as mandated by the False Claims Act.

The False Claims Act is a federal law that imposes liability on companies or individuals who knowingly submit false claims for government funds. The law allows the government to recover damages in cases of fraud, often doubling or tripling the financial penalties.

Government officials emphasized the importance of ensuring that disaster relief funds are used appropriately and that contractors fulfill their obligations.

“The proper use of federal disaster recovery funds is essential to rebuilding communities and protecting residents from future disasters,” said a government representative involved in the case.

Accountability in Disaster Recovery Contracts

This case highlights the government’s ongoing efforts to hold contractors accountable for their work in federally funded disaster recovery projects. The Department of Justice and other federal agencies routinely investigate potential fraud to ensure taxpayer funds are used effectively.

The West Virginia flood recovery efforts were a critical step in rebuilding devastated areas, and ensuring compliance with contract terms remains a top priority for disaster relief oversight.

While Thompson Construction has settled the case, the investigation underscores the necessity for strict adherence to contract requirements in disaster recovery efforts to protect affected communities and prevent similar issues in the future.

Originally reported by WCHS.